QuickBooks vs. Xero: Which Accounting Software is Right for Your Small Business?

Choosing the right accounting software is a big decision for any small business. In the US market, two top contenders often come up: QuickBooks® Online and Xero. Both companies hold significant market share and are easy for your team to use, but each one does things a little differently.

This guide will help you compare them. We'll look at their features, costs, and what makes each one stand out. This way, you can pick the best fit for your business needs. We'll also discuss the Wise Business account. The global account that can help your company with all things cross-border.

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Wise Trustpilot Score: 4.3 stars on 230,000+ reviews
No minimum balance requirement and no monthly fees
Integrates with QuickBooks, Xero, Sage, and more

QuickBooks vs. Xero: Quick Overview

Feature3	QuickBooks Online	Xero
Key features	Robust all-around accounting. Strong inventory management. Extensive reporting.	User-friendly interface. Strong bank feeds. Good for collaboration.
Main merchant fees	Varies by plan. Additional fees for payroll add-ons.	Varies by plan. Some transaction fees may apply for specific payment integrations.
Great for	Businesses needing comprehensive features and detailed reporting.	Businesses prioritizing ease of use and collaboration.
Trustpilot rating	4.3/5 (based on over 150,000 reviews)1	4.1/5 (based on over 15,000 reviews)2

QuickBooks Online vs. Xero Plan Overview

Both companies have multiple plans, and you'll need to assess them alongside your business needs to get the most of each accounting software.

QuickBooks Online Plans3	Xero Plans3
Simple Start - Invoicing - Expense tracking - Track mileage - Estimate projects - Manage receipts	Early - Send quotes and invoices - Enter bills - Reconcile bank transactions - Submit VAT/GST returns
Essentials - All Simple Start features - Track time - Pay bills - Manage 1099s - Track project profitability	Growing - All Early features - Bank reconciliation - Hubdoc (for receipt capture) - Capture receipts - Track expenses
Plus - All Essentials features - Track inventory - Create purchase orders - Track project profitability - Run payroll (additional cost)	Established - All Growing features - Multi-currency - Project management - Claim expenses
Advanced - All Plus features - More users - Advanced reporting - Dedicated support - Batch invoicing and expenses

Comparing Features: QuickBooks Online vs. Xero

Both QuickBooks Online and Xero offer a suite of tools to manage your business finances.³ They aim to make bookkeeping easier. Let's dive into what they offer.

QuickBooks Online: Key Features

QuickBooks Online is a powerhouse for many businesses. It offers a wide range of tools.

Feature	Description
Invoicing	Create and send professional, customizable invoices (add logo). Accept online payments directly. Set up recurring invoices.
Expense Tracking	Record and categorize business expenses. Snap receipt photos with the mobile app. Automatic transaction import via bank connection.
Bank Reconciliation	Match bank transactions with accounting records for accuracy.
Reporting	Generate and customize financial reports (Profit & Loss, Balance Sheet, Cash Flow).
Inventory Management	Track stock levels. Calculate the cost of goods sold. Manage purchase orders.
Project Profitability	Track income and expenses for specific projects to determine profitability.
Multi-user Access	Grant access and control permissions for accountants or team members.
Mobile App	Manage finances on the go (send invoices, track expenses, view reports).
Customer Service	Access phone, chat, and email support. Large online help center available.

Xero: Key Features

Xero is known for its clean design and ease of use. It's a great option for those who want a straightforward system.

Feature	Description
Invoicing	Create and send branded invoices. Customers can pay online through integrated payment gateways. Set up recurring invoices.
Expense Tracking	Record bills and expenses. Connect your bank accounts for automatic bank feeds.
Bank Reconciliation	Xero's bank feeds are often praised for their speed and accuracy. Reconciliation is a key strength.
Reporting	Provides standard financial reports. You can customize them to a degree. Dashboards offer a quick overview of your business's financial health.
Hubdoc Integration	Xero includes Hubdoc, a powerful tool for automatically capturing and organizing bills and receipts.
Multi-currency	Handle transactions in different currencies. This is available on higher-tier plans.
Project Management	Track projects, time, and costs. This helps understand project profitability.
Collaboration	Designed for easy collaboration with accountants and bookkeepers. Multiple users can access the system.
Mobile App	A user-friendly mobile app lets you manage invoices, expenses, and bank transactions from anywhere.
Customer Service	Offers email support. They also have a comprehensive online help library and community forum.

QuickBooks Online vs. Xero Fees

Both QuickBooks Online and Xero offer different plans with varying features and prices. Understanding the costs involved is crucial. It's important to note that these are subscription fees. Additional fees can apply for certain services.

QuickBooks Online Fees:

QuickBooks Online offers four main plans.⁴ Prices can change and often have introductory offers.

Plan Name	Starting Price (Monthly)
Simple Start	38 USD
Essentials	75 USD
Plus	115 USD
Advanced	275 USD

Additional Fees:

• Payroll: QuickBooks Payroll is an add-on service. Its cost depends on the plan chosen and the number of employees. It can range from about 88 USD to 203 USD+ per month, plus per-employee fees.⁵ Similar to the general QuickBooks product offering, they do offer introductory discounts on their payroll product, which can lower the price significantly.
• Payment Processing: Fees apply for accepting credit card payments through QuickBooks Payments.⁶

Online Payments

Payment Method	Description	Fee
Cards & Digital Wallets	Invoices, recurring payments, or quick requests paid using Visa, Mastercard, Discover, American Express, Apple Pay, PayPal, and Venmo	2.99%
ACH Bank Payments	Invoices or quick requests paid using an electronic transfer (EFT) from a customer's bank account directly into yours	1%

In-Person Payments

Payment Method	Description	Fee
Card Reader/Tap to Pay	Payments accepted in person via a card reader or Tap to Pay on iPhone \ Accepts Visa, Mastercard, Discover, American Express, Apple Pay, Google Pay, and Samsung Pay	2.5%
Manually Keyed-in Cards	Payments processed by manually entering a customer's card information	3.5%

• International Fees: While QuickBooks Online handles multi-currency within its plans (like Plus and Advanced), sending or receiving international payments often incurs standard bank wire fees or transaction fees from payment processors. These can be higher than specialized services, such as Wise Business, which specializes in low-cost international payments.

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Xero Fees:

Xero also has tiered pricing.⁷ Prices can vary based on introductory offers.

Plan	Starting Price (Monthly)
Early	25 USD
Growing	55 USD
Established	90 USD

Additional Fees:

• Payment Processing: Xero integrates with various payment providers such as Stripe, which has its own transaction fees. The costs are 2.7% + 0.15 USD per transaction for domestic cards and 4.2% + 0.15 USD per transaction for international cards.⁸
• International Fees: Xero's multi-currency feature is available on the Established plan. However, when you send or receive international payments, you will likely incur fees from your bank or payment gateway. These fees can include foreign transaction fees and currency conversion markups.
• Bill Pay Fees:

1. When Paying from a Bank Account⁹

Supplier Receives	Fee Per Bill Payment	Notes
ACH Transfer	0.50 USD
Check	1.50 USD
Fast Check	20 USD
Overnight Check	50 US
Instant Bank Transfer	1%	Maximum fee is 75 USD
Same Day ACH Transfer	1%	Maximum fee is 75 USD
Wire Transfer	10 USD
Same-day Wire Transfer	1%	Minimum fee is 10 USD; maximum fee is 75 USD

2. When Paying with a Credit Card⁹

Supplier Receives	Fee Per Bill Payment
Same Day ACH Transfer	2.9%
Check	2.9%
Fast Check	2.9% + 20 USD
Overnight Check	2.9% + 50 USD
Instant Bank Transfer	2.9% + 1% (75 USD max)
Same-day Wire Transfer	2.9% + 10 USD

International Transaction Considerations:

When comparing international fees, both QuickBooks and Xero rely on traditional banking channels or third-party payment processors for international transfers. This can lead to:

• Unpredictable Exchange Rates: You might not get the best rate
• Hidden Fees: Banks and payment processors can add fees that aren't always obvious
• Slower Transfer Times: International bank transfers can sometimes take several business days

This is where specialized services like Wise can offer a more transparent and cost-effective solution for international payments, even when using QuickBooks or Xero for your core accounting.

QuickBooks Online vs. Xero Benefits

Both companies have their own benefits. Understanding these can help you make the best choice.

What are the benefits of QuickBooks Online?

• Comprehensive Features: Offers a very wide range of tools, suitable for complex businesses
• Strong Inventory Management: Excellent for businesses that sell physical products
• Robust Reporting: Provides deep insights into your business finances
• Large App Ecosystem: Integrates with thousands of other business applications
• Widely Used by Accountants: Many accounting professionals are familiar with QuickBooks

What are the benefits of Xero?

• User-friendly Interface: Easy to navigate and understand, even for those new to accounting software
• Excellent Bank Feeds: Streamlines bank reconciliation
• Good for Collaboration: Makes it simple to work with your accountant or team
• Affordable Entry Point: The "Early" plan is quite cost-effective
• Included Receipt Capture: Hubdoc is a great tool for organizing documents

Bottom Line

QuickBooks Online suits businesses needing comprehensive features, like robust inventory and detailed reporting. Xero is better for small businesses and startups valuing an intuitive interface, easy collaboration, and excellent bank feed tools, often at a lower starting cost. While both are excellent, QuickBooks prioritizes feature depth, and Xero focuses on ease of use and collaboration.

Save Time and Hassle With Wise Business

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. Wise makes it easy to send, hold, and manage business funds in currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. Simply add the local account details when billing international customers to receive international payments with no fees.

Account opening is 100% online, with no need to visit a branch or book appointments.

Once you’re set up, you can connect to software such as Wave, FreshBooks, and more. You can also withdraw funds from Stripe without currency conversion fees.

Open a Wise Business account online

Some key benefits of Wise Business include:

Major local account details to receive international payments with ease No monthly account fees just a simple one-off fee for account details Receive payments from e-commerce platforms such as Amazon or via Stripe. Free invoicing tool to generate and send invoices. Create invoices using the Wise invoice generator or invoice templates. Accounting integrations, including a QuickBooks Bill Pay connection. Bill payments will be synced, matched, and categorized in QuickBooks for simple reconciliation. Access to BatchTransfer. Fast payment of up to 1,000 people.

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Sources:

1. Intuit Quickbooks UK | Trustpilot
2. Xero | Trustpilot
3. Xero vs. Quickbooks | Quickbooks.com
4. Quickbooks Online Pricing | Quickbooks.com
5. Payroll Services Pricing | Quickbooks.com
6. Credit Card Processing Fees & Rates | Quickbooks.com
7. Pricing Plans | Xero US
8. Accept Card Payments In Person for B2B | Xero US
9. Fees for Online Bill Payments | Xero US